democratic control of the economy

If there is to be a social transformation that replaces capitalism, workers generally and initially activists, will have to be convinced that there is an alternative way of making economic decisions that is different from bureaucratic regimes such as the Soviet Union. In “Perspectives on 21st Century Emancipation” Julien writes that the abolition of capitalism requires the collective appropriation of the large means of production and not the appropriation by the state. In a separate reply to one of my posts, Democracia Communista (is that Paco?) writes that nationalization in general will solve nothing and that means of production have to be in the hands of the workers themselves.

It seems to me that we have to try to clarify how democratic workers control can be exercised over the economy. The key question is how is the surplus, which is produced by the whole society (globally) to be allocated? At a given point in time, how much resources are to be devoted to, say, building new factories that make construction equipment, or tractors, or cars or refridegerators or clothing? How much construction for new housing or for schools or for hospitals?

If what Julien and DC are proposing is that an individual factory be collectively owned by the workers of that factory, then the allocation of surplus will be made by the market, and you will still have capitalism. Worker-owned factories will only be able to expand production by making a profit, selling at more than their costs. Each worker-owned collective will be operating as a capitalist, subject the same economic laws that Luxemburg describes. Maybe this is not what either of you are talking about, but if not, what do you mean?

I think the questions of ownership and democratic control have to be separated. In Yugoslavia, factories were owned by worker-collectives, but there was no democratic control.

To have a democratically-run economy, society needs to be able to allocate surplus freely, so you can’t have ownership at a local level. You need state ownership because that way you do not need for any unit to be producing a profit. A state can allocate resources that are produced by the entire society.

But as Marx pointed out after the Paris Commune, you can not have a bureaucratic state. Like the commune, or the strike committees that arise in mass strikes, you need decisions made by workers delegates, who can be mandated and revoked. Exactly how this can be done in large countries, where you would inevitably need several layers of delegates, how decisions are to be made at national and local levels and many other questions are not easy and it would be utopian to try to work them out in advance. But the basic point is that you do need a democratic state to make economic decisions and it has to own the major means of production.

This question has very practical implications for the workers movement. The nationalization of the steel industry in Venezuela happened because the workers in the steel industry forced Chavez to do it. They were involved in a long-running strike, where the governor of the state in Venezuela was using the National Guard against the strikers. But by mobilizing the community behind their demands for nationalization, the workers war able to win. I think they were right to demand nationalization. We would be wrong to oppose it. But now, the battle will really begin as to how the steel industry is run. Will it be run by delegates elected by the workers or will it be run by bureaucrats reporting to Chavez?

If what Julien and DC are proposing is that an individual factory be collectively owned by the workers of that factory, then the allocation of surplus will be made by the market, and you will still have capitalism. Worker-owned factories will only be able to expand production by making a profit, selling at more than their costs. Each worker-owned collective will be operating as a capitalist, subject the same economic laws that Luxemburg describes. Maybe this is not what either of you are talking about, but if not, what do you mean?

Completely agreed and I think there is no debate on that : workers controlling at the individual level factories is still capitalism. In some countries this exists: Argentina, France... and previously at a bigger level in Youguslavia.

"Democratically controlled" means that the Revolutionary state made up of local councils of workers and consumers alike will plan the production and the distribution of the surplus democratically as a whole.

The very fact that you ask the question shows that indeed the article is not precise enough. This has to be clear because by "democratically controled" or "workers' power" can mean different things : self-management in a capitalist system or state-owned companies.

I think the questions of ownership and democratic control have to be separated. In Yugoslavia, factories were owned by worker-collectives, but there was no democratic control.

I think that they do not necessarily need to be split. It all depends on whether we are at the social level or the individual level : social (society) control (via a state based on councils with delegate) and social ownership is the same.

The nationalization of the steel industry in Venezuela happened because the workers in the steel industry forced Chavez to do it. They were involved in a long-running strike, where the governor of the state in Venezuela was using the National Guard against the strikers. But by mobilizing the community behind their demands for nationalization, the workers war able to win. I think they were right to demand nationalization. We would be wrong to oppose it. But now, the battle will really begin as to how the steel industry is run. Will it be run by delegates elected by the workers or will it be run by bureaucrats reporting to Chavez?

I also agree that the nationalization can be one step forward, but it is not socialisation because the State is not run by workers' council but by the bourgeois parlament and governments or "bureaucrats reporting to Chavez". The same happened in other countries that eventually ended up privatizing (even in Cuba).

This is an important question, especially in Latin America. Workers are demanding nationalizations. But as Cuba shows it, it is not enough. We have to back nationalizations as a positive reform but go forward demanding the democratization of the State.

One thing to point out is that Cuba (supposedly socialist because of an economy almost completely planned) tested privatization even before the Soviet Union ended. In the beginning of the 1980s, a major public company was set up as a joint venture (public from the cuban state and private) called CIMEX so as to test a more "profitable" structure. Later on it got nationalized (to increase the bureaucrats power) but today many companies are joint-ventures.

The point is that nationalization is not enough. Social arguments are easy to present : no democracy, no unions... but we have to point why the bureaucratic/state capitalist systems can not survive at the economical level, as you once said.